CICC maintains an outperform rating on OCUMENSION-B (01477) with a target price of 10.16 Hong Kong dollars.

CICC releases research report, maintaining OCUMENSION-B (01477) net profit of 560 million yuan in 2026, and introducing a net profit of 2.07 billion yuan in 2027. The bank maintains an outperform industry rating and a target price of 10.16 Hong Kong dollars based on DCF, with an upward potential of 23.45% from the current stock price. Key points from CICC: Performance slightly below expectations in 2025 The company announced its performance in 2025: revenue of 804 million yuan, a year-on-year increase of 92.7%; a loss of 159 million yuan during the period, a year-on-year narrowing of 40.8%, attributed to the increase in R&D expenses, slightly below the bank's expectations. Continuous growth in revenue coupled with cost optimization, adjusted EBITDA turned positive The company's operating revenue in 2025 was 804 million yuan, with a CAGR of over 80% from 2023 to 2025. The ophthalmic product revenue in 2025 was 756 million yuan, an increase of 96.7% year-on-year, benefiting from the increased sales volume of products introduced by Alcon, Aoseping, and Acculite, as well as sales royalties from Boyu Jing's successful commercialization. The company continues to control expenses, with sales expense ratio, management expense ratio, and R&D expense ratio in 2025 decreasing by 21.5%, 23.0%, and 18.0 percentage points year-on-year to 33.0%, 22.3%, and 9.3% respectively, with the sales expense ratio at a relatively low level in the pharmaceutical industry. The company's adjusted EBITDA in 2025 was 50 million yuan, achieving positive for the first time. Rich R&D pipeline, steady progress in clinical trials and registration of core varieties According to the company's announcement, as of December 31, 2025, the company has 5 products in Phase III clinical trials, 3 real-world studies, and 1 in the commercial registration stage. Among them, OT-702 (Boyu Jing) has been approved for market listing by NMPA; the company expects OT-101 (low-concentration atropine) to complete Phase III MRCT three-year dosing and unblinding earliest in July-August 2026; the presbyopia drug OT-802 (1.25% pilocarpine) has obtained Phase III clinical trial approval; OT-301 (gebex prostaglandin) has achieved the primary endpoints in a global multicenter Phase III clinical trial, surpassing latanoprost; and OT-211 domestic Phase III clinical trial has completed the enrollment of the first subject. Continued expansion of commercial networks, steady increase in production capacity According to the company's announcement, as of the end of 2025, the company has covered over 22,000 hospitals, including over 2,800 Grade Three hospitals. In November 2025, a strategic cooperation agreement with Sinopharm Holding regarding imported products was reached to optimize the ophthalmic medical supply chain and improve the efficiency of imported medical products distribution. In terms of production, the Suzhou base completed 27 batches of commercial production in 2025, and the localization production of Youshiying has entered the review stage, with the bank expected to reduce the overall cost of the company's commercial products. Risk warning: Progress of new product launches may not meet expectations; candidate drug profits may not meet expectations.